Many low income working families are eligible for a variety of income tax credits – including the refundable Earned Income Tax Credit (EITC) – which are only available to qualified individuals who file federal income tax returns. This extension initiative seeks to assist people through (a) preparation and electronic filing of income tax returns and (b) the provision of financial education to help families maximize their tax refunds. Using the IRS’s Volunteer Income Tax Assistance (VITA) program as its cornerstone, this financial education initiative provides free tax preparation and filing services and promotes family income tax credits and opportunities for increased financial stability and wealth building among low- to moderate-income, disabled, home-bound, and “English-as-a-second-language” taxpayers. The focus is in rural areas where choice – access to and availability of – tax preparation and e-filing services is limited. This educational initiative reaches its audience through the “3 P’s”:
Promotion: Promote tax credits and services. Pre-tax season promotion via media and financial education classes provides awareness of the need to file federal income tax returns to maximize tax refunds by taking advantage of family tax credits.
Preparation: Prepare and e-file tax returns. During the tax season (January through April), free tax preparation and electronic filing services are offered to qualified taxpayers at VITA sites. Capitalizing on the relationship building opportunities and the timely teachable moment a large tax refund provides for financial education, financial information and on-site coaching are provided so learners can make maximum use of income tax refunds.
Planning: Plan for financial stability and wealth building. Financial information is provided to each taxpayer and additional financial education opportunities through extension are promoted to tax refund recipients. The goal is for families to use tax refunds to increase financial stability and wealth building opportunities.
For more information, visit the MoTax website.